Hua Xia Shi Bao·2025-08-18 10:13Core Viewpoint - The recent performance of the company shows a simultaneous decline in revenue and growth in profit, primarily due to cost optimization measures. However, the sustainability of this model raises concerns [2][4]. Financial Performance - The company has experienced a continuous decline in operating revenue for seven consecutive quarters from Q1 2024 to Q1 2025, with the largest drop of -7.24% in Q2 2024. The decline narrowed to -1.92% in Q1 2025 but did not reverse the downward trend [3]. - Despite a 1.92% drop in revenue, the net profit attributable to the parent company increased by 4.75%, attributed to significant cost optimization. In Q1 2025, the company reduced three types of expenses by 137 million yuan [4][5]. Cost Management - The company has a history of using cost-cutting measures to boost profits, having reduced sales expenses from 3.598 billion yuan in 2023 to 3.255 billion yuan in 2024, and management expenses from 654 million yuan to 613 million yuan [5]. - The reduction in asset impairment losses from 310 million yuan in 2023 to 182 million yuan in 2024, a decrease of 41.44%, also contributed to profit growth [6]. R&D Investment - The company's R&D expenses have been declining, with a drop from 1.335 billion yuan in 2023 to 1.033 billion yuan in 2024, representing a 22.58% decrease. In Q1 2025, R&D expenses were 216 million yuan, continuing the downward trend [7][8]. - The termination of several R&D projects, including the PD-1 project, reflects a strategic shift and raises concerns about the company's innovation capabilities [10][13]. Core Business Performance - Revenue from both chemical preparations and traditional Chinese medicine preparations has declined, with the overall revenue dropping by 4.97% in 2024. The chemical preparations segment saw a 6.87% decline, significantly impacted by national medical insurance negotiations and centralized procurement policies [14][15]. - The traditional Chinese medicine segment experienced a 19.27% revenue decline, primarily due to a drop in demand for antiviral granules following a high base effect from the previous year [15]. Market Challenges - The company faces multiple challenges in future growth due to policy adjustments and changes in market demand, particularly in the chemical and traditional Chinese medicine sectors [2][14].